Food inflation to slow in 2022, says USDA
After two years of higher-than-usual inflation rates, food prices will rise by a near-normal 2.5% in 2022, said the USDA in its first estimate of food costs in the coming year. High prices for meat and fresh food are forecast to drive the food inflation rate to 3% this year.
Food prices rose 3.4% in 2020, the largest increases in nine years, due to the pandemic, which forced a near-shutdown of restaurants and created spot shortages in grocery stores. Outbreaks of COVID-19 slowed meat production and drove up retail prices for beef, pork, and poultry. Meat prices are rising more rapidly than usual this year as the economy recovers, but the increases are not at large as last year. The rate will slow noticeably, to 2.5%, in the new year, said the Food Price Outlook.
Restaurant and carry-out food prices will rise an average of 3.5% in 2022, well above the 20-year average of 2.4% annually, said the USDA. Meanwhile, grocery prices will rise 2%. “Food away from home,” the category for restaurant, cafeteria, and carry-out food, has seen higher annual inflation than groceries for more than a decade. “The divergence is partly due to differences between costs of serving prepared food at restaurants and retailing foods in supermarkets and grocery stores,” says the USDA.
The Food Price Outlook is available here.